Marketing Local Beef in T ennessee: Producer Practices and - - PowerPoint PPT Presentation

Marketing Local Beef in T ennessee: Producer Practices and Consumer Preferences

Results from producer focus groups conducted by: Megan Bruch, Susan Schexnayder, Margarita Velandia

Participant’s Profiles

12 8 6 7 6 5 2 4 6 8 10 12 14

Murfreesboro Pleasant View Pigeon Forge

# of participants # of farms

26 Participants 18 Farms

Participants’ Profile

Characteristics Average Range Acres Farm: Lease (acres) 331 25-1000 (10 leased 0 acres) Own (acres) 312 5-1400 (1 owned 0 acres) Years Marketing Beef to Consumers 8.3 8 months – 50 years

• Approx. Head of

Cattle Marketed as Meat to Consumers in Last 12 Months 28 3-120

Participants’ Profile

 Other products sell directly to

consumers – 5 only sold beef

Market Channels

 Farmers Markets ( 55%)  From the farm (55%)  Specialty Grocers – Butcher Shops (22%)  Restaurants (22%)  CSAs (11%)  LocalHarvest.org (5%)  On-line Sales

Farmers Markets

PROS CONS

Price set by farmer Time consuming and time away from farm Builds a pool of repeat customers through building relationships Farmers markets (FM) are seasonal/ FM season overlap not ideal with best slaughter time Exposure/Opportunity to build relationships with other potential buyers (Restaurants, CSAs) Logistics may be a challenge (loading/unloading, transportation, electricity sources, booth set up) Facilitates consumer education Time investment in building buyers’ trust / Educating consumers on product safety Sales variability due to weather and demand

From the Farm

PROS CONS Good opportunity for producers with established customer base May be difficult to acquire new customers Good Margins - small transaction costs, price set by farmer Remote farm locations may diminish

• pportunities for on-farm sales

Immediate payment May require large freezer storage space Facilitate year-round sales Additional investments to guarantee a positive customer experience (bathrooms, farm appearance) Opportunity to sell other products and services Liability of having customers on the farm Ability to plan a “market” day Scheduling appointments may be challenging Ability to offer more variety of cuts Lower labor/time Ability to better set visit time, payment types, expectations of visit

PROS CONS Potential to reach a large pool of potential customers Additional effort to maintain consistent customer base Facilitates delivery information Expensive packing and shipping

On-line Sales

Specialty Grocers/Butcher Shops

PROS CONS Potential for high volume/consistent sales High volume requires high production Potential for winter sales Wholesale/discounted price Excellent exposure to the farm brand Logistics may be a challenge (deliver to store) but less than other market outlets Butcher shop and some grocer stores provide processing, reducing cost Establishing relationships with grocers and butcher shops

PROS CONS Potential for high volume

• f sales

May exclude small producers Consistent volumes/year- round (for some restaurants) Inconsistent/ Unpredictable demand (for some restaurants) Exposure of farm brand (if farm brand is identified) Price lower than retail/discounted price

Restaurants

CSAs

PROS CONS Costs covered up-front as consumers pre-pay Price fixed before production (lack of flexibility to adjust to cost changes) Demand/production volume known Cuts not selling well may be moved through shares

LocalHarvest.Org

PROS CONS Free access Payments delayed Exposure to a large pool

• f customers looking for

local products Commission taken by the website/additional cost (if use store option) Price set by producer No cost associated with website management On-line store

• pportunity

Customer Characteristics

 Curious – ask questions mostly about production methods.  Females account for most buyers.

• Seem to be motivated by health.

 Male buyers may be more motivated by quality (marbling,

etc.)

 Variety of income levels.  Variety of income levels. Lower income customer buy ground

beef and soup bones.

 Older customers looking for “beef like they had when

they were growing up.”

 Younger customers looking for specific production

practices (no added hormones).

 Customers with special health needs.  Ethnic groups looking for special cuts (oxtail, tongue).

Promotion Strategies

 E-mail  Website/blogs  Facebook/Twitter  Pick Tennessee Products  Local Harvest  Local Table  Craigslist  Donations (brand exposure

and strategy to attract new customers)

 Newspapers  Referrals  Very few use discounts

Pricing Strategies

 Pricing for profit (knowing cost of

production).

 Pricing based on competitors’ prices.

• Other producers
• Traditional and specialty retail stores

 T

esting prices to identify consumer willingness to pay.

 Price differentiation by outlet (different

prices at different farmers markets).

Questions Asked by Customers

 Is product…

• Natural?
• Organic?
• Local?
• Grassfed?
• Grain fed – what kind, source, GMO?

 Use pesticides?  How finished?  From your farm?  In a pasture? Confined?  About the farm

Other Information Needed

 How to

• Store
• Defrost/thaw
• Cook

 Recipes  Cooking loss

Fresh vs. Frozen

 Most beef sold frozen.  Fresh beef sales are to restaurants,

butcher shops, and limited special orders.

 Customers’ misconceptions about quality

• f frozen beef/customer education about

frozen products.

Most Popular Cuts

 New customers try ground beef then

maybe steaks on next purchase.

 Steaks sell out first.  Roasts – by special order or during

winter.

• Providing recipes may help

Quantity and Frequency of Purchases

 Repeat purchases dependent on taste and

quality

 Likely dependent on freezer capacity and

access to producer

 East TN farmers market customers

purchase small amount weekly

 Middle and west may purchase larger

quantities less frequently – monthly for example

Packaging

 Vacuum sealed packing (customer wants

to see the product).

 Costumers’ preferences: 1 lb ground beef

package, single steak packages.

Payment T ypes Accepted

 Credit cards

• Those that do not

accept have lost sales

 Cash  Checks  EBT

• When available through

farmers market

Challenges

 Regulations “intimidating” but “doable”  Time

• Start-up
• Build customer base

 Variability in production costs  Distance to and availability of processors

• Regular and advance scheduling helps

 Limited labor, land and financing for

scaling up

Marketing Local Beef in T ennessee: Producer Practices and Consumer Preferences

Results from producer focus groups conducted by: Megan Bruch, Susan Schexnayder, Margarita Velandia